You have a great product and you want to grow your business but just selling it locally isn’t doing the trick. This is an issue for many businesses. When you want to scale up your business you need to have the foundation of your business solid and you have a business plan and pitch deck that sell, ensure you have IP protection in place, know what you want as an outcome. Some great ways to scale your business are licencing, joint venture, investment and m&a meaning merger and acquisition. Before explaining the different options you have, I’ll explain what you need to have in order to scale up successfully.
A business plan and pitch deck that sell are vital for your business. Business plan is not only your roadmap in terms of your business but it also tells your investor, partner or buyer everything needed about your business and its viability and growth opportunities. A pitch deck in turn is the short version of your business plan without confidential information that grabs the person’s attention and makes him/her hungry for more.
IP protection like patent, no matter temporary 1 year one or the actual patent, or trademark are not only important for your security but also increases the value of your innovation and business. Companies are more keen on dealing with companies that have IP protection in place. If you plan to just sell your innovation, then role of IP protection is to increase the value of your innovation helping you get a better deal. Otherwise IP protection prevents competitors and potential partners from stealing your intellectual property.
What is your your desired outcome? Do you want to continue running your business and have a established company be stake holder or do you look for a distributor and manufacturer for your innovation or product in other country? Maybe you look to just sell your company and make a quiet exit at some point as result of merger.
Scale up options you can consider
Licencing is a popular way to scale up, especially in tech. many app developers tend to licence production and distribution of their product helping them grow their business.
Joint venture through partnership can be a company you and your partner open in other country to manufacture and sell your products.
Acquisition means that other company becomes major/main shareholder of your company by nuying most of the shares.
Merger means that the two companies become one and your company doesn’t exist any longer because you were bought entirely.
Case renewable energy start up
A renewable energy startup approached me for assistance as they wanted to scale up their business by finding a European partner who would join forces and manufacture their off-grid electrostatic energy storages. As they had state-of-the-art innovation in their hands and had already produced multiple units and leased them in their home country, they wanted to grow and current energy crisis in Europe gave the opportunity to execute their plan. Their problem was that they couldn’t find suitable partner in Europe with required capital. Neither did they have IP protection, a website or a business plan or proper pitch deck that would actually sell their innovation.
First step was to establish the desired outcome and ideal partner. In their case large organization in energy sector that invests in green energy and sustainability.
After the creation of ideal partner profile, it was time to craft a proper business plan for European market that sells and a pitch deck based on the business plan.
Third step was to build a website that explains what the company does and where the innovation can be used as well as why it’s better than the alternatives in the market.
After the basic ground work was done, it was time to find the decisionmakers in the companies. VP in product development, innovation, R&D.
As you can imagine, VPs tend to have their email rather busy 5 days a week, so I had to grab their attention from the first moment they checked their inbox. What I did was start with a relevant and eye-catching subject line. It was in total 4 words and hit the core. Renewable energy and innovation. The message had to be professional and concise. Short introduction who I am, why I approach them, a short description of the innovation in couple sentences and end with a call to action looking forward to hearing from you soon.
Out of 8 companies 2 answered and scheduled a meeting. One of the companies was interested in continuing negotiations and a pitch deck and introductiory video was sent. Once NDA was in place I shared the business plan and technical presentation. The company was interested in becoming offtaker and potentially a partner for my client but unfortunately due to lack of IP protection my client lost his chance of multimillion euro deal and speedtrack to growth. However, the company informed that they’d love to work with them together in future once they can share the required details.
Now, lesson here is to always do your ground work, get professional assistance and ALWAYS protect your intellectual property. I was disappointed at first that I didn’t get to see my client sign a contract with the German company but it served as a reminder that I always have to ensure that my clients get the basics right before starting the scale up process. Now my client has a pitch deck and a business plan that is proven to help initiate multimillion euro negotiations as well as a website to validate their existence and legimacy.
If you’d like to learn how you can scale up successfully, get in touch with me today.